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The Many Startup Investor Types and Who is Right for Your Deal?

The Many Startup Investor Types and Who is Right for Your Deal?

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    How to Run an ICO-Cybersecurity Best Practices

    Cybersecurity is now a key part of business operations across all industries, especially so for Initial Coin Offerings (ICOs).  It has become a concern for ICOs because of recent, high profile hacks – in particular the loss of approximately $40 million worth of digital currency for the DAO, a decentralized venture capital firm built on the Ethereum network, that was hacked as a result of a security flaw. ICOs must maintain a high level of security which requires attention from anyone running an ICO. The initial reaction among many who learn of a hack is, “I thought the blockchain could not be hacked.” Hacking a well-established blockchain such as the Ethereum or Bitcoin network would still require a tremendous amount of computing power so it is virtually impossible. Instead hackers go after the point of weakness which is the entry points for transferring funds into and out of wallets and exchanges. For those running an ICO, it’s important to take specific steps to prevent scammers. For example, it’s important not to post to an ICO directly with tokens you hold on an exchange as this can easily be hacked.  Also, scammers spoof the ICO with similar looking web pages, and accounts.  Many ICOs today give very specific instructions on how to place tokens on the site for the ICO. One strategy is to take email addresses for those interested in funding the ICO and then when the pre-sale/crowdsale starts, provide funding instructions only to those who signed up.  By displaying the funding instructions on the website you invite hackers to attack your site.   Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more.  Connect with him about fundraising, business growth, and emerging technologies.     If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months. Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now! If you have any questions, please contact us at info@tencapital.group.

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    Pre-Sale Campaign for Your Initial Coin Offering (ICO)

    In developing your Initial Coin Offering (ICO), the marketing campaign in advance of the pre-sale or crowd-sale of the token is important for building awareness and growing the network of supporters. The key is to identify your target audience and post in the forums that reach that audience. The campaign should run at least two months as it takes that much time to get around to all the contacts and groups. There are several channels for your pre-sale campaign. Some channels reach a large number of supporters such as BitcoinTalk others are more targeted. These channels include: Classic PR – press releases that describe the upcoming launch of your token- you can use a press release service or send out the release directly yourself. It helps to create a compelling angle in the first paragraph. The PR campaign should start three months before the launch of the crowd-sale. Banner advertising – display ads for extensive reach on Google, Facebook, and more. This can generate more awareness of your ICO and drive some traffic to your site. Influential marketing – your best influencers are advisors to your ICO and their network of contacts.  Reach out to them to see how you can best leverage their network and contacts. Social media – Twitter, Facebook, LinkedIn are great sources to connect with those in the community. YouTube – an explainer video which shows off what your ICO product does can be very helpful in generating understanding and support. Bounty campaigns – referrals driving traffic to your site. A bounty program can activate your user base with incentives and drive referrals. Placements in blogs – posting in relevant blogs and websites. Find blogs that reach your target audience and use their influence to communicate your message. Viral media – If you want to get a community of supporters to get excited and share your message you need to give them a reason to. Competitions can generate a viral effect. Community marketing – posting in community blogs and podcasts. You’ll need to check to see if your chosen community allows for commercial marketing. Events – meet-ups, conferences etc. Events are a great way to do this but like all marketing is a balance between cost and return.     Hall T. Martin is the founder of TEN Capital and a builder of entrepreneur ecosystems by startup funding through angel networks, funding portals, syndicates, and more.  Connect with him about fundraising, business growth, and emerging technologies.     If you are interested in tracking a startup, you can sign up for TEN Capital’s Monitoring service which tracks key startups and provides information about their revenue, earnings, and other key financial information.  The first 3 companies are free for 6 months. Signing up as an investor with TEN is easy and free. Visit our Investor Page and sign up now! If you have any questions, please contact us at info@tencapital.group.

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    NSS Labs Raises Funding From Texas Venture Growth Forum

    A critical step for companies seeking growth-stage investment is making connections with venture capital firms and other investment groups who are looking to get involved in promising businesses. That’s been especially true for companies in Texas for years, as the lack of a conference that could bring founders concentrated in Texas together with potential funders. Thankfully, that has changed after the first annual Texas Venture Growth Forum – a conference held in Austin and presented by Texas Entrepreneur Networks and Hermes Investment Group – that served as a two-day “speed dating” event for entrepreneurs and investors. Many connections were made between representatives of the 27 companies and 42 investors who attended, with a recently announced Series B investment of $16 million in Austin-based NSS Labs as one of the biggest success stories from the gathering. That deal saw LiveOak Venture Partners and Delta-v Capital team to help NSS Labs continue to grow as a leader in the information security industry. Venu Shamapant, a general partner with LiveOak, selected five businesses his company had early stage investments in to attend the conference in hopes of finding partners who could help them grow to their full potential. “We’d identified the best companies that were in the right stage to get in front of people who were looking to become involved in a growth-stage company,” Shamapant said. “For some of them maybe it wasn’t exactly the right time to do a deal, but they got to start building relationships with late-stage firms and that makes it easier to re-engage when the time is right.” Shamapant said the conference and its emphasis on capital for Series B and growth will help the investment climate in Austin and Texas as a whole move beyond its recent emphasis on startups and early stage funding. “The focus has been on been on early stage companies, but you think of it sort of like a pig moving down the snake… now there are companies that have progressed to the Series B stage,” he said. “The conference is focused on fixing that and being a catalyst so more interactions happen and people are talking to each other continuously.” Dan Williams, vice president of Delta-v with offices in Dallas and Boulder, said he went into the conference looking for companies with more than $20 million in revenue and operating at or close to break-even financially. NSS Labs fit that profile and is concentrated in information security, which has been an interest of Williams for many years. He said he and other investors were pleased to learn that Texas finally had a geographically focused investor conference akin to similar events in cities like San Diego, Atlanta, and Denver. “It’s great to see a community coming together there and for a tech hub that’s as prominent as Austin is, it’s great to have an event that brings the right people together,” he said. “A conference is nice because the leads are immediate and you can move forward from there, whereas most other times deal flow comes from relationships and networks and that is a much longer process for everyone.” The timing of the fall 2015 conference was perfect for NSS Labs’ CEO and president Vikram Phatak and his management team, who had just decided to pursue a Series B round. The $16 million from LiveOak and Delta-v will let the company expand its offerings, build its customer base and grow its headcount from 70 employees to more than 120 by 2019. Phatak said the conference setting offered a “pre-filtered” selection of possible investment partners, with 15 meetings that eventually led to a deal. “A conference allows you to very efficiently check off the ‘no’ box for a lot of people, so you can be as efficient as possible with your time and focus,” Phatak said. “What it did for us is put us in front of people who had an interest but who we might not have met otherwise.” With the Austin and Texas entrepreneur community being fairly close knit, Phatak expects word about the advantages of attending to grow as the second event nears. “I know several smaller companies that as the conference gets closer I’ll reach out to their investors and encourage them to have their companies go to it,” he said. “You look at something like TechCrunch in the bay area and that’s a place where deals happen, and it gets a reputation, and then more deals come about because of that.”  

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    How to Achieve Market Positioning

    When investors look at a startup, the one thing they want to see more than anything is revenue traction, or momentum.  The first step to building excitement in your startup is often to… Get the word out- While a traditional PR route can certainly help generate interest in your startup, investing big money may not be the most prudent move, especially at this stage.  Luckily, by taking a do-it-yourself approach, you can still launch an effective campaign.  The key to generating buzz in the press is building relationships – with bloggers, reporters, and anyone who can put the word out about your startup. The best way to do this is to give the press what they need – a good story, insightful quotes, and on-topic content.  You can add to your value as a press contact if you can also… Be an expert in your field- Knowing your space, the market players, and the latest developments in your field can help you be a go-to source for content, and allow you to build relationships in the press and beyond. Strive to be at the top of your niche—the more recognition you can get as a knowledgeable insider, the better your reputation, and the more attention your startup will receive.  Don’t be afraid to specialize, if that helps you stand out, but also don’t hesitate to… Follow the trends- Pay attention to the latest trends – what types of companies are getting funded, and why? Then do your best to innovate—whatever is working, try to do that different and better.  In other words, your product should be both relevant and distinctive.  To get this across to the market, you need to… Build a brand- Good branding is critical, and will help you stand out in a crowded field. In marketing, be clever, and consider the unconventional.  Don’t be above a publicity stunt, but only if it is cost-effective, and in-line with your overall strategy. Offer value through content marketing that will educate and entertain. Whatever you do, you must develop a target market and… Know your customers- Undoubtedly, the biggest key to gaining revenue traction is building your customer base, and to do that you must know who they are. What do your customers want? How are you helping them, and how are they using your product? What are their interests, and where can you find them? Cultivating word-of-mouth is fine, but make sure you have a complete marketing strategy as well. Revenue traction, simply put, is when your company starts earning money through organic transactions. It shows that your product is in demand.

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    Technical Due Diligence

    1 min read Technical Due Diligence (TDD) is a detailed evaluation of a company’s technical side, including both existing software and hardware products and those in development. Potential investors need to gather detailed information about a prospective company to highlight any potential risks associated with their investment. While the Technical Due Diligence process may seem intimidating to some small business owners initially, it is, in fact, a routine step. If efficiently planned and executed, a TDD should be able to answer investor questions in easy-to-understand terms. Whether you are a potential investor, or a startup new to the process, the following article provides an insightful take on making the process work. When embarking on the TDD process, investors typically want to know about 4 major areas: Strategy: Does the company and its product(s) fit within the investor’s overall growth objectives? Does the company’s own strategy match up with the investors’ strategy? Quality: Are there quality issues with the company’s product that will require fixing? If product development or fixes are needed, what are the expected costs? Growth:  Is the company or its product poised for growth? What roadblocks would hinder growth in terms of labor, manufacturing, infrastructure, and/or development? Can the product be scaled? Stability:  Are the company founders and their employees in it for the long haul? Are their processes organized and well-documented? Are there contingency plans and redundancies in case of an unforeseen event? Read more: https://staging.startupfundingespresso.com/education/ Hall T. Martin is the founder and CEO of the TEN Capital Network.TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group

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    Setting up an Advisory Board for your Company

    In onboarding an advisor there are several key points to consider. First, a board advisor is not the exact same thing as a board director but rather acts more like a board observer.  They are entitled to receive the same information as provided board members and like board observers, they have no voting rights.  A contract should be setup for a formal advisory board member to include the following points: 1. Duties The board advisor acts as a consultant and does not represent the company as does the CEO or the board of directors.   The contract should determine the number and type of meetings (conference calls, group sessions, etc) and the preparation required for the meetings. 2. Terms of Service Advisors generally serve at the will of the CEO or the board but can also be setup for specific term of service.  This makes it easier to transition into new and out of arrangements as the company grows. 3. Compensation The terms of compensation must be made clear as well as the handling of expenses.  For equity compensation vesting schedules should be determined. 4. Information Rights While the advisor has rights to the board notes, the advisor does not have the right to inspect the company’s books. 5. Confidentiality Confidentiality of information is a given. 6. Disclosing conflicts of interest Conflicts of interest must be considered and disclosed as confidential information about the company will be provided to the advisor. 7. Indemnification The advisor is typically indemnified by the company in the event of a lawsuit. 8. Jurisdiction The advisor agreement should make clear the state of jurisdiction in the event of a dispute. TEN Capital Network is proud to announce the launch of our Advisory Program which provides a roster of qualified advisors to assist in supporting your company in its growth plan. This includes increasing revenue traction, identifying the business model, and helping prepare the company for a fund raise. Learn more and sign up as an advisor! This program is only available to those enrolled in the TEN Capital funding program. If you want to find an advisor for your business, please contact us at info@tencapital.group.

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    Three Ways to Know Your Market Better

    One of the key criteria in funding startups is the entrepreneur’s knowledge of the target market and customer. Size of market, growth rates, and segmentation are key components the entrepreneur should know well. In this post we’ll look at three ways to know your market better. The first place to look is on the web. You’ll need to first identify which industry(s) you’re in. From that you can find out several facts about your target market size. The next step is to find out what trade associations and conferences are related to it. You can contact the trade association and find out more about the market. Usually, the director of the association has the key market information you’re seeking and will make that available to you in an email or phone call. Their job is to foster the growth of their industry segment by informing others about it. The third step is to attend a trade conference. You’ll learn more from those on the exhibit hall floor than you can from articles or other means. It’s worth a day walking the show to get the details. Finally, avoid market research reports. These reports cost anywhere from $2,000 to $25,000. Most of these are simply a compilation from a direct mail campaign that is far from comprehensive. While they can be helpful they certainly aren’t worth the money. Best regards, Hall T.

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    Food & Beverage Investments Quarterly Review

    The Food and Beverage industry has seen a slow down in the quarterly investments. Peaking in the second quarter of 2015, the investment dollars have dropped substantially although the number of deals continues to remain constant if not slightly upward. You can see the investments and deals by quarter here: Quarter Funding (Food & Beverages) Deals (Food & Beverages) 2015 Q1 1090.68 140 2015 Q2 1263.43 142 2015 Q3 799.02 137 2015 Q4 939.69 133 2016 Q1 250.21 153 2016 Q2 395.32 143 2016 Q3 371.09 139 2016 Q4 3165.94 154  

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    Top Investors in Food and Beverage Companies Over the Last 5 Years

    The top investors for the last five years by number of deals puts Circle Up at the top of the list with 96 deals, followed by Accel Foods at 29, Food-X at 17, MassChallenge at 16, and 14 by Indie.Bio.  The list contains not only venture capital but funding portals, angel networks, and accelerator groups.  You can see the list here: Last Year Last 2 years Last 5 years CircleUp – 30 CircleUp – 75 CircleUp – 96 AccelFoods – 9 AccelFoods – 20 AccelFoods – 29 CAVU Ventures – 9 Food-X – 17 Food-X – 17 MassChallenge – 6 MassChallenge – 14 MassChallenge – 16 301 INC – 5 Indie.Bio – 12 Indie.Bio – 14 Food-X – 5 CAVU Ventures – 10 Khosla Ventures – 14 New Crop Capital – 5 301 INC – 7 Central Texas Angel Network – 12 S2G Ventures – 5 New Crop Capital – 7 Emil Capital Partners – 11 HSBC – 4 S2G Ventures – 7 Ben Franklin Technology Partners – 10 Indie.Bio – 4 Ben Franklin Technology Partners – 5 CAVU Ventures – 10  

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